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Virtual Advertising as New Sponsorship Inventory and Activation Platform

By Jon KanderApr 21, 2011

Reading this month’s Partnership Activation newsletter (a must read for sports business professionals), I found the utilization of virtual advertising during in-game broadcasts by several NHL teams compelling. While in-game virtual advertising is not a new concept (baseball has been utilizing it for behind-the-plate advertising for 10+ years), it is becoming more prevalent amongst NHL teams in recent years. Thinking about it in greater detail, selling digital advertising inventory would be a great fit for teams in several different sports and a potential league-wide activation platform for a sponsor.

Teams in other professional sports could build off of MLB’s and NHL’s existing digital advertising model. MLS teams could place virtual advertising behind the goalies during games. A brand could also implement a strategy similar to Allstate’s imbedding its logos in the goal post nets during college football games and place its logo between the goal posts during the NFL London game each year (a big Target logo immediately jumps to mind).

A few months ago, my colleague Sarah Hartman wrote a blog post about the overwhelming number of logos cluttering the basketball court during several NCAA college tournaments. Beyond the clutter issue, the logos negatively impacted the on-court performance because they caused several players to slip throughout the game. While I am not advocating for the same number of corporate logos to appear on the court (it was slightly ridiculous), replacing those court stickers with virtual logos would at least eliminate the negative performance impact while still allowing for nearly the same in-game exposure.

While the 25,000+ attendees wouldn’t see a digitally-inserted sponsor logo, that loss of exposure is not likely to have a significant marketing impact on the partnership. From a Valuation standpoint, IEG views on-court logos as signage, which would add (at most) $.05 per attendee to the sponsorship’s fair market value. On-court logos only provide logo/brand awareness and typically do not provide any brand messaging or calls-to-action to the consumer, which limits their overall value.

On the brand side, I wonder if a sponsor could approach a league and/or each of a league’s teams with a sponsorship idea where the primary benefit in its team-level packages is in-broadcast digital advertising. Similar to Allstate’s branding during college football games, the logo could appear during a specific point of each game broadcast. For example, after any hard hits during an NHL game an ad for aspirin or Icy Hot could appear for 10 seconds. This would increase the value of a sponsor’s ad by connecting the brand with a specific moment or message that the sponsor could also activate/promote around. In addition, digital ads can be changed throughout the season in order to promote a new product offering, etc.; whereas, logos along the ice rink are more permanent in nature.

Virtual advertising can be a valuable benefit to provide to high-level team sponsors. It provides sponsors with a significant amount of in-game broadcast visibility and a unique platform for the sponsor to activate against while not cluttering up the playing field or negatively impacting in-game performance. As more and more professional sports teams continue to make this form of advertising available to their sponsors, this medium could become the next TiVo-proof way for sponsors and advertisers to reach consumers at home.

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